Mervyn King remembers James Edward Meade, one of the greatest British economists. Meade taught at LSE and received the Nobel Memorial Prize in Economic Sciences in 1977.
James Meade wrote economics the old-fashioned way – with pen and paper, and working out for himself the answers from first principles. In October 1977, James was preoccupied with putting the finishing touches to the Meade Committee Report on reform of the British tax system which subsequently appeared in January 1978. As he wrote in a letter earlier that year, “although I am technically in retirement, I have never, since Whitehall days, worked so hard as on this report”.
One morning he travelled by bus from Cambridge to the University of Buckingham where he was due to give a lecture. On descending from the bus, he was greeted, to his surprise, by a group of dignitaries waiting to inform him that during the journey the announcement had come from Stockholm of the award of the Nobel Prize. Meade shared the Prize with the Swedish economist Bertil Ohlin “for their pathbreaking contribution to the theory of international trade and international capital movements”, according to the official citation.
That citation does not capture the bewildering breadth of Meade’s contributions to economic theory and policy making. Indeed, it is hard to think of an aspect of economics to which Meade did not contribute – unemployment, monetary policy, fiscal policy, income and wealth distribution, poverty and social security, co-operatives, taxation, international economics and economic growth.
More than any other of his contemporaries, he used rigorous economic theory to show how an efficient market economy could be combined with an intense concern about inequality of income and wealth. He produced many schemes for public policy initiatives to promote equality while retaining the benefits of competition. Imbued with an enormous intellectual curiosity into economic problems, Meade’s success reflected many of his “old-fashioned” qualities. Given a book to review, he would typically put it aside after one chapter, open a notebook, and start to develop the theory himself. His unpublished correspondence and papers, now available in the LSE Archives, are full of handwritten proofs and examples of economic propositions on which Meade worked.
Meade’s pathbreaking contributions to economic theory, especially in the areas mentioned in the Nobel citation, were made while at the LSE from 1947 to 1957. His time as a professor at Cambridge in the following decade came to an end when Meade resigned his chair as a result of the feuds within the Cambridge Faculty, ending his renowned lecture series to undergraduates and going back to full-time research in his college.
As a result, his time in Cambridge in the decade before the award of the Nobel Prize was made less happy by the virulent ideological battles then sweeping the Cambridge Economics Faculty. At one seminar, James brought the squabbling to an abrupt halt by suddenly, and completely uncharacteristically, screaming “I can shout too”. It is hard to resist the impression that if the rest of the Faculty had been as mild-mannered and as intellectually curious as James himself, Cambridge would have made a greater contribution to economic thought than it in fact did.
Old-fashioned too were his impeccable manners, charm and kindness. When he wanted to reflect more carefully on a point that you had made, whether in writing or orally, James would gently stroke his chin and tentatively start his reply by “it seems to me that…”. Whether with colleagues, family, music or his wide circle of friends, James represented the virtues of scholarship and the English gentleman.
Meade donated one-half of his Nobel Prize money to the LSE Library and the other half to the Marshall Library in Cambridge. With his prolific writing across so many areas in economics, and his Nobel prize, few people have done more to justify LSE’s motto rerum cognoscere causas – “to Know the Causes of Things”.
The 40th anniversary of the award of the Nobel Memorial Prize in the Economic Sciences to James Meade is certainly cause for celebration for all LSE staff, students and alumni.